August 25, 1998   
This Date's Issues: 2325  • 2326

Johnson's Russia List
#2326
25 August 1998
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Moscow retailers hike prices as rouble dives.
2. Toronto Sun: Matthew Fisher, Time's running out for Boris - 
and Russia.
3. Ed Dolan: Why Chernomyrdin?
4. The Independent (UK): Phil Reeves, Decline and fall of Yeltsin 
empire.
5. AP: U.S. Cautious About Kremlin Shakeup.
6. Moscow Times editorial: Ill, Paranoid Yeltsin Looks Like Suharto.
7. Washington Post editorial: Backward in Moscow.
8. New York Times editorial: Mr. Yeltsin's Unsteady Hand.
9. Renfrey Clarke: My Experience of Cows, or Carol Williams on Russian 
Agriculture.
10. Fred Weir on public reactions to changes.
11. RFE/RL NEWSLINE: CHERNOMYRDIN TO FORM COALITION GOVERNMENT;
FATE OF NEW GOVERNMENT, DUMA TIED; OUR HOME IS RUSSIA TRIES TO WOO
YAVLINSKII; REGIONAL HEADS EXPRESS RESIGNATION, MILD SUPPORT...
AND SOME REGRETS. 
12. Reuters: Russian press: Yeltsin diminished by shakeup.]

*******

#1
Moscow retailers hike prices as rouble dives

By Peter Graff
MOSCOW, Aug 25 (Reuters) - Retailers scrambled to raise their prices on
Moscow's streets on Tuesday as the Russian rouble plunged 10 percent against
the dollar. 

The sharpest exchange rate fall in nearly four years sent Russians scurrying
to dump their roubles for hard currency. 

By early afternoon the rush on exchange booths was not quite as severe as
during last week's initial announcement that the rouble would be allowed to
drop. But at wholesale goods markets, where sellers keep a close eye on the
currency, the inflationary impact was felt immediately and more sharply than
before. 

At the Kiev Railway Station market, where large numbers of street vendors
stock up on tobacco and sweets to sell across Moscow, most of the aluminium
kiosks were shut. Merchants could be seen inside a few frantically relabelling
their stocks. Many of their customers seemed to be milling about in a daze. 

``Apollo for 28 roubles? My lord!'' said a middle-aged man, tapping at a box
of cigarettes behind the glass at one of the few operating stalls. ``And L&M's
for 43! I just bought them for 40!'' 

Restaurants and cafes were printing up fresh menus hiking prices. Il Pomodoro,
an Italian trattoria, drew up new menus over the weekend and planned to print
a whole new set again before opening on Wednesday. 

Many retail shops still had not taken the new rates into account, making
bargains available for those with hard currency, but these were only likely to
last until new stock arrived. 

Japanese compact disc players at one electronics shop had become far cheaper
in real terms. But ``when they bring us new goods, there will be new prices,''
the saleswoman said. 

At a nearby pharmacy, imported aspirin was being sold for the same rouble
price as before the plunge, and a bakery was still asking the same two roubles
for a loaf of white bread. 

A McDonalds Big Mac was decidedly easier to chew for patrons with dollars. At
13 roubles it had cost $2.06 last week but was now only $1.65. 

Exchange booths that managed to keep dollars in the till had queues stretching
into the streets of patrons buying dollars for about 8.5 roubles or selling
them for about 7.5. 

Before the government effectively devalued the currency last week, the margin
between buying and selling rates on the street was rarely more than two or
three percent. 

The freeing of the rouble was the final nail in the coffin for reformist Prime
Minister Sergei Kiriyenko, who was sacked by President Boris Yeltsin on Sunday
and replaced by former premier Viktor Chernomyrdin. 

Tuesday's 10 percent fall on the Moscow Interbank Currency Exchange came as
commercial banks, permitted by the central bank to withdraw more rouble
reserves to ease a liquidity crunch, immediately began dumping roubles for
dollars. 

Russian banks are also nervously awaiting an announcement of a restructuring
of short-term government rouble debt, which is likely to hurt their balance
sheets further. 

Suppliers and distributors of consumer goods often clear debts with each other
based on the interbank rate. 

*******

#2
Toronto Sun
August 25, 1998 
[for personal use only]
Time's running out for Boris - and Russia
By MATTHEW FISHER (74511.357@CompuServe.com) 
Sun's Columnist at Large

 MOSCOW -- As Boris Yeltsin indicated to Russians on television 
yesterday, the chief attraction of Viktor Chernomyrdin, who was 
dramatically reinstated as prime minister on Sunday, is that he is as 
comfortable as a pair of old shoes. 
 That Chernomyrdin's shoes never had any sheen and had long ago begun to 
smell a little, is not such a great liability in a nation where 
Yeltsin's flashy and unpredictable theatrics haven't worked and the 
stench from generations of incompetence, corruption and decay permeates 
everything. 
 Russia is said to be on the brink this week. What such a dramatic word 
actually means here, let alone what happens once you go over the brink, 
is a mystery. 
 The closest thing to a consensus emerging yesterday, as weary 
Muscovites once again tried with little success to change their pathetic 
rubles into American dollars, is that some kind of partial palace coup 
took place on Sunday when Yeltsin announced he was once again firing his 
entire cabinet, including his prime minister, Sergei Kiriyenko, and 
bringing back Chernomyrdin, who was accused of "lacking dynamism" when 
the president sacked him as prime minister a mere five months ago. 
 The thinking is that Yeltsin understood or was made to understand that 
this humiliating volte-face was the only way he could keep his job. 
According to this reading of the Kremlin tea leaves, Yeltsin's advisers, 
the top generals in the three security ministries and the handful of 
billionaire oligarchs who have plundered Russia during Yeltsin's reign, 
gave the president what amounted to an ultimatum. 
 Only Chernomyrdin, with decades of experience as a faithful, faceless 
apparatchik, could calm Russia at a time when the ruble is crashing, the 
stock market has virtually ceased to exist and every government bill is 
going unpaid. 
 That some sort of deal was struck was already clear late Sunday night 
when Chernomyrdin's supporters boasted that he had been given a 
completely free hand to deal with the economy. Yeltsin seemed to confirm 
that - and more - yesterday when he all but annointed Chernomyrdin as 
his successor in 2000, stating on national television that only an 
experienced "heavyweight" such as the former prime minister could give 
Russia the stability and unity required leading up to the next 
presidential elections. 
 Chernomyrdin's specialty is supposedly as a manager but while serving 
as prime minister from 1992 to March, 1998, his record was every bit as 
bad as Yeltsin's. And the president's record is so dreadful it has no 
recent global equal. 
 Despite many silly bouquets from western leaders, neither man was or is 
much interested in democracy or in the kind of radical economic reforms 
undertaken with some success in neighboring Warsaw Pact states or the 
three former Soviet statelets bordering the Baltic Sea. 
 Yeltsin has always had a penchant for the dramatic gesture, the bottle 
and the jugular, but little patience for the bull work of government. 
Chernomyrdin survived for so long beside Yeltsin by being even-tempered, 
stodgy and deferential and by carefully building coalitions within the 
government and across the country. 
 MUDDLING PAIR 
 But there is one stark similarity. Both men have long records of 
muddling through seemingly impossible situations; survival skills that 
were learned as rising stars during Leonid Brezhnev's Golden Age of 
Stagnation. 
 Yeltsin took the preferred Soviet track to the top, becoming a ruthless 
local and regional party boss before joining the Politburo. Chernomyrdin 
was part of that vast army of colorless bureaucrats who kept the Soviet 
Union stumbling along. He eventually became energy minister and the 
biggest player in Gazprom, the national oil and gas monopoly which was 
never very well run, but given the country's immense natural resources 
always earned lots of money and had lots of political influence. 
 Yeltsin's sclerotic kleptocracy has robbed Russians of their dreams. It 
has now fallen to Chernomyrdin to once again dole out cabbages and 
carrots from a larder that is almost bare. Most of his compatriots will 
be thankful if he can even do that. 
  
******

#3
From: aibec@knight-hub.com (Ed Dolan)
Date: Tue, 25 Aug 1998 
Subject: Why Chernomyrdin?

Sometimes when one has difficulty understanding another culture, a look at
that culture's humor can help. For example: This spring, after 5 years as
prime minister, Chernomyrdin's presidential prospects were rated at around 5
percent of the electorate. Why now, after 5 months out of office, should
Yeltsin suddenly think he stands a chance as a candidate in 2000? If the
logic of the following Russian anecdote applies, he may be counting on the
fact that people are already looking back on the Chernomyrdin era as "the
good old days."

Two friends, Masha and Natasha, get together for tea each Sunday afternoon.

"My life is so awful, you can't believe it!" Says Masha one week. "I live in
one room of a communal apartment with two kids and my mother in law. The
kids are sick and cry all day. My mother in law is bedridden, I have to feed
her and change her clothes, and she just carps at me. A drunk lives in the
room next door--he brings his friends home every night and they make a
racket just as the kids are ready to go to sleep. Then the whole bunch of
drunks get sick in the bathroom, and I have to clean that up. In the third
room there is a family from Baku with 7 kids! You can imagine how much noise
they make. I tell you, it couldn't be worse. What can I do?"

Natasha answers, "Get a goat, keep it in your room with you."

Next week Masha comes back looking very, very hassled. "Natasha, you can't
imagine what hell my life is since I got that goat! He stinks, he's not
housebroken, he gives the kids a rash, if I put him in the hall, the drunk
beats him and he bleats, he ate some vegetables that the Baku family were
going to sell at the market and they called the police--I tell you, I am
absolutely in despair. What can I do?"

"Sell the goat," Says Natasha.

The next week Masha comes back, fresh, well rested, all smiles. "Natasha,
you're so wonderful!" she says. "You can't imagine how calm and happy my
life has been since I sold the goat!"

*******

#4
The Independent (UK)
25 August 1998
[for personal use only]
Decline and fall of Yeltsin empire
By Phil Reeves in Moscow 

THE REIGN of "Tsar" Boris Yeltsin has entered its twilight. His 
television appearance yesterday to explain why he had reappointed a 
prime minister whom he sacked only five months ago was not quite as 
humiliating as a prime-time confession to an affair with an intern. But 
it was bad enough. His choice of a premier who is widely disliked, and 
whose name is associated with fudge, economic decline, and cronyism, is 
a personal defeat. 

Mr Yeltsin knows he will be seen as having buckled under the pressure of 
a narrow clique of oligarchs who exploited the privatisation of state 
assets to build vast fortunes - and subsequently used them to pressure 
the Kremlin to defend their interests. But the events of the last 36 
hours may also mark a larger watershed in the rule of Mr Yeltsin, a 
seven year helter-skelter ride in which he has veered across the 
political spectrum, from autocrat to rough-hewn democrat. 

The snowy-haired man who in 1991 stood on a tank outside the White 
House, flourishing his democratic credentials in the face of drunken 
Communist coup plotters, also launched war in Chechnya, surrounded 
himself with hardliners, and used tanks to bombard a recalcitrant 
parliament. Exhausted by hard-living, heart trouble and the task of 
trying to pilot the country through the post-Soviet chaos, this same man 
may now have concluded that it is time to ease his way out. 

"It looks like the President is starting to withdraw from office step by 
step, handing over power to the heir," said his arch-enemy Mikhail 
Gorbachev. For once, the former Soviet leader's views did not sound 
purely like sour grapes. Mr Yeltsin loves power, and is a master at 
centralising it on the Kremlin. He is also incorrigibly unpredictable, 
whether in his ludicrous exploits - drunkenly conducting an orchestra in 
Berlin, pinching a secretary - or in politics. He proved that yet again 
last Sunday, sacking his government at the height of a fiscal crisis, 
adding political chaos and limbo to the economic maelstrom. What he does 
today, he can - and often does - undo tomorrow. 

Witness the case of Anatoly Chubais, his financial trouble-shooter whom 
he has sacked three times. In addition, the zealous Sergei Kiriyenko was 
almost certainly fired because he was construed as threat to the 
oligarchs' empires - which are rooted in energy, banking and the media. 
Several feared his government would allow their banks to collapse, 
unable to pay vast foreign debts. 

But, having bankrolled Mr Yeltsin's election campaign in 1996, they 
appear to have called in the favour by demanding a compliant prime 
minister. 

Yet signs are beginning to surface which suggest Mr Yeltsin may now have 
accepted his rule is winding down. The well-connected Ekho Moskvi radio 
station quoted sources saying Viktor Chernomyrdin had insisted, as a 
condition of his return to office, that he has the right to appoint the 
head of the "power ministries" - the Interior Ministry, the Federal 
Security Services and the Ministry of Defence. No one understands the 
importance of retaining control over the security forces better than Mr 
Yeltsin. If the story is true, then it amounts to a significant 
reduction of his powers. 

In his speech to the nation yesterday, the President clearly anointed Mr 
Chernomyrdin as his preferred successor in the election of 2000. His 
departure cannot come too soon for his growing army of critics, whose 
ranks embrace the majority of Russians, almost all the lower house of 
parliament, and plenty of enraged international investors, who view Mr 
Chernomyrdin's appointment as the kiss of death to Russia's efforts to 
make the transition to a healthy market economy. 

They point to the evidence that he is no longer up to the job. Although 
he appeared to recover well from the quintuple coronary bypass in late 
1996, questions have repeatedly arisen over his mental state. This theme 
has a bleak familiarity for Mr Yeltsin, who these days appears far older 
than his 67 years. He has long been prone to bouts of depression and 
withdrawal, and has openly admitted to "dark thoughts". A best-selling 
account by his former bodyguard Alexander Korzhakov claimed that Mr 
Yeltsin had twice tried to commit suicide by leaping in the Moscow river 
and locking himself in a steam bath. 

There is certainly little doubt that he had a nervous break-down when he 
was banished by Mr Gorbachev to the Soviet construction ministry in 
1987. Although he has retained a gift for springing political surprises, 
the number of embarrassments has grown. 

During a trip to Sweden late last year, he appeared unsure of where he 
was, and seemed to think Germany and Japan possessed nuclear arsenals. 
Last Friday, he appeared to refer to the US attacks on Sudan and 
Afghanistan as an "act of terrorism". And only three days before the 
government announced its decision to devalue the rouble last Monday, Mr 
Yeltsin was publicly declaring that devaluation "won't happen . It is 
not a question of what I think, of my own fantasies, of what I do or do 
not want to see. It is all calculated." 

True, this may have been a last-ditch attempt to build confidence in the 
beleaguered currency; but it is as likely that he was simply out of 
touch. After all, he had been on holiday for five weeks despite a 
rapidly worsening political crisis. 

How long he will stay in the Kremlin now depends on several factors. He 
is mindful of his place in history, which will at least give him credit 
for holding the first democratic transfer of power in Russia for a 
thousand years. He will want to be sure that Mr Chernomyrdin stands a 
strong chance of succeeding him, and will defend the interests of the 
ruling elite that has evolved during the Yeltsin years. This could 
conceivably mean striking a deal with the Communist-nationalist 
opposition which includes rewriting the constitution to allow the 
president to be appointed not by popular vote, but by parliament. 

And much rests on the advice of the so-called Kremlin "Family", 
dominated by his daughter and image-maker, Tatyana, and his chief of 
staff, Valentin Yumashev. As Russians look on with bewilderment as the 
Kremlin staggers from one disaster to another, there are plenty who hope 
that the old man's aides will now gently tap him on the shoulder, and 
point to the door. 

******

#5
U.S. Cautious About Kremlin Shakeup
August 25, 1998
By BARRY SCHWEID

WASHINGTON (AP) -- Ever so carefully, the Clinton administration is distancing
itself a bit from Boris Yeltsin -- just in case.

The Russian president's abrupt and drastic shakeup in the Kremlin left U.S.
officials stressing they support reform over any particular individual. The
clear implication: If Yeltsin gives way to a successor, that person could
enjoy U.S. support provided he promoted the twin goals of capitalism and
democracy.

``For us, it has always been true that policy matters more than personality,''
White House press secretary Mike McCurry said Monday.

The shakeup last Sunday, in which Yeltsin restored former Prime Minister
Viktor Chernomyrdin to that post, served as ``a reminder of the volatility
that exists in Russian domestic politics,'' McCurry said on Martha's Vineyard,
the island off Massachusetts where President Clinton was on vacation. ``We are
well aware of that.''

The upheaval left American officials hesitant to pledge their unqualified
support to Yeltsin's leadership.

Still, Clinton intends to go ahead with his planned Moscow summit next week,
one that is programmed to give him some access to Yeltsin's political foes and
possibly a chance to address the Russian people.

Clinton was expected to telephone Yeltsin today, a White House official said,
allowing the president a better a chance to size up the situation for himself.

Having experienced Yeltsin's rocky rule, administration officials took comfort
in his restoration of Chernomyrdin as prime minister.

While not a zealous reformer, the experienced bureaucrat is a known quantity
in Washington, especially to Vice President Al Gore, with whom he has mapped
economic cooperation.

Still, the reasons for the latest shakeup were not entirely clear to
administration officials. It may simply be a mark of a troubled leadership
groping for a successful political formula.

``We've known for a long time that President Yeltsin faces a very complicated
international dynamic,'' McCurry said.

The shakeup and recall of Chernomyrdin may reflect an effort by Yeltsin to
reach out to the State Duma, the Communist-led lower house of parliament,
which had condemned the Russian president in an emergency session two days
earlier.

A key question is whether the longtime energy boss has an effective strategy
in mind to follow last week's devaluation of the ruble and freeze of the
government bond market. Officials here consider the steps necessary but not
themselves a solution.

A U.S. official, speaking on condition of anonymity, insisted the Clinton
administration's support for Yeltsin was unchanged, but he declined to assess
the level of U.S. confidence in Yeltsin's government. ``The last thing we want
to do is to shake it up anymore,'' he said.

Dimitri Simes, president of the Nixon Center, a foreign policy think tank,
said Chernomyrdin's return makes it ``easier for the United States to start
disengaging from Yeltsin because there is a safe alternative.''

He called the reappointment ``the first piece of good news'' from Russia in a
long while.

``He is one person who has the confidence of foreign investors, and he is on
fairly good terms with international monetary organizations, the Clinton
administration and the Duma,'' Simes said in an interview.

******

#6
Moscow Times
August 25, 1998 
EDITORIAL: Ill, Paranoid Yeltsin Looks Like Suharto 

>From the point of view of a sick, old man with failing mental powers and 
a deep sense of paranoia, President Boris Yeltsin's decision to bring 
back Viktor Chernomyrdin as prime minister might have looked reasonable. 

Yeltsin was troubled by the economic times he barely understands. His 
response was that Russia does not need some whiz kid but a solid figure 
-- a "heavyweight" -- to steer the ship of state. 

Yeltsin, a former Communist Party boss who earned his political spurs in 
the Brezhnev era, probably thinks Chernomyrdin's backroom friendships 
with the power elite will sort things out better than any financial 
tricks. 

The ailing president's mind is also clearly plagued by the prospect of 
what happens when he steps down. He wants to ensure he will be succeeded 
by a man who shares his views, who will give him a graceful exit and who 
will not throw him or his friends in jail. 

Of course, Yeltsin cannot just name a successor -- Russia is a democracy 
-- and it will be a hard sell to have the discredited, recycled 
Chernomyrdin elected. But with the support of the power elite and their 
media, he may think that, too, should be manageable. 

Such is the president's apparent logic. It is flawed and reckless. 

For one thing, the timing is madness. Russia is in the middle of its 
worst financial crisis since 1991, but it now faces the prospect of 
weeks of horse-trading over a new Cabinet. 

Even if that can be quickly resolved, Chernomyrdin is not the man to 
lead Russia out of crisis. He is, after all, the man who more than 
anyone else except Yeltsin created this mess by piling up a mountain of 
state debt. As one wit in the Duma put it, Yeltsin has replaced a man 
who could not do anything in five months with someone who could not do 
anything in five years. 

Chernomyrdin's network of pals in the power elite will not empower him 
but compromise him and prevent him from making the tough decisions 
needed to win back confidence. 

And as for the succession, Chernomyrdin is very much an outside bet. He 
will in a few months, if not a few weeks, be tarred with the blame for a 
truly appalling financial and social crisis. It will take a miracle to 
elect him. 

Yeltsin is now a lame duck whose influence and relevance will fade. 

Similarities to the last days of the Suharto regime in Indonesia are 
growing. It is hard to see what can now pull Russia back from the brink. 

******

#7
Washington Post
August 25, 1998
Editorial
Backward in Moscow

RUSSIAN PRESIDENT Boris Yeltsin's reappointment of a prime minister he 
had fired only five months ago seems an act of desperation. When he 
cashiered Viktor Chernomyrdin in March, Mr. Yeltsin derided the 
long-serving premier as a spent force. By returning this same politician 
to power now, the president will have convinced many of his countrymen 
that the same disparagement could be applied to him.

Back in March, faulting Mr. Chernomyrdin's government for its lack of 
"dynamism, initiative, new viewpoints [and] fresh approaches and ideas," 
Mr. Yeltsin appointed a young, pro-reform prime minister and cabinet. 
But the new team moved from one crisis to another, culminating in the 
recent decision essentially to devalue the ruble and default on some of 
Russia's debt. The causes of this downward spiral were partly external 
-- spillover from the Asian financial crisis and a fall in the price of 
Russia's most important export, oil. But the crises also were a legacy 
of the half-measures achieved by Mr. Chernomyrdin, who was unable or 
unwilling to push through reform in land, tax and other law that Russia 
needs to attract investment. The result was economic depression and the 
emergence of a corrupt capitalism dominated by a few oligarchs whom Mr. 
Chernomyrdin was loath to challenge.

That is what Mr. Yeltsin now has returned to. The president said his 
goal was "not to allow a step backward, but to maintain stability." But 
in Russia's crippled state, there can be no stability, only progress 
through difficult reform or continued decline. The debt moratorium has 
scared foreign investors away. Russia's young banks are teetering. There 
will be a huge temptation to save them by stoking inflation, which could 
lead to Weimar-like political instability.

In one sense, Mr. Yeltsin's latest tack is nothing new. He has 
alternated between pushing reform, and thereby provoking the 
Communist-dominated parliament, and backing away from reform when the 
opposition became too intense. Perhaps, given the deep divisions within 
Russian society, he had no choice. But the result has been to leave 
reformers feeling abandoned, Communists dissatisfied and ordinary 
Russians disillusioned.

The latest turmoil further clouds the prospects for a summit between Mr. 
Yeltsin and President Clinton scheduled to begin a week from today. If 
Mr. Yeltsin wants to proceed, Mr. Clinton is right to go, to show 
support for democratization and free-market reform. But as a practical 
matter, Mr. Clinton cannot bring much help to Moscow next week. He has 
correctly stressed that the choices Russia makes, whether to cast its 
lot with Europe and the West or to turn inward, have huge consequences 
for America. But those are choices that no outsider can make on Russia's 
behalf. 

*******

#8
New York Times
August 25, 1998
Editorial
Mr. Yeltsin's Unsteady Hand 

ive months after abruptly firing Prime Minister Viktor Chernomyrdin, 
Boris Yeltsin has just as abruptly brought him back. An increasingly 
erratic President Yeltsin flailing about in the Kremlin is becoming a 
major cause for concern in Moscow and in Washington, recalling the 
unnerving days when ailing and aging Soviet leaders like Leonid Brezhnev 
continued to wield power despite faltering judgment. 

Although Mr. Chernomyrdin is a known quantity, his return to office is 
anything but reassuring. It seems to signal a particularly untimely 
retreat from economic reform. The challenge for President Clinton, who 
still plans to proceed with a Moscow summit meeting scheduled for next 
week, is to lend a stabilizing hand to the Yeltsin-Chernomyrdin 
Government, without appearing to lend American endorsement to any 
slowing of reform. 

Only last March, Mr. Yeltsin dismissed Mr. Chernomyrdin and, declaring 
that revitalizing the Russian economy required "new blood," appointed a 
Cabinet of youthful and committed reformers under Sergei Kiriyenko. Now, 
in the midst of a dangerous banking crisis that could destroy Russia's 
ability to borrow in international markets, Mr. Yeltsin has dumped those 
reformers in favor of a man whose legacy of halfway measures and 
tolerance for corruption contributed mightily to Russia's underlying 
problems. 

As Russia tries to navigate its way out of a financial crisis that 
requires making difficult choices, it can ill afford Mr. Chernomyrdin's 
cautious, compromising leadership style. Economically, Russia is now in 
a deep, downward spiral. The Government has been unable to collect taxes 
or pay its workers and has lost the confidence of foreign investors who 
only months ago were pouring money into a country that was ill equipped 
to handle it. Finding a way to restructure the debts of both the 
Government and the Russian banks will be a difficult challenge. The 
previous Government had promised to announce its plans yesterday, but 
did not last long enough to do so. 

While bringing back Mr. Chernomyrdin makes little sense in terms of 
Russia's economic problems, it is much easier to decipher politically. 
Mr. Chernomyrdin, who was himself a Soviet-era industrial manager, has 
good relations with the two sectors of Russia's political establishment 
most threatening to Mr. Yeltsin's authority -- the Communist opposition 
in Parliament and the powerful new financial and industrial groups that 
now dominate the news media and contribute heavily to political 
campaigns. 

By appointing their ally, Mr. Chernomyrdin, the ailing Mr. Yeltsin may 
have improved the odds on his own political survival at the expense of 
Russia's economic future. 

The big industrial groups bankrolled Mr. Yeltsin's 1996 re-election 
victory, and their leaders have exercised considerable political 
influence ever since. They loathed the financial reforms announced by 
the Kiriyenko administration, particularly its efforts to tighten tax 
collection. They are also determined to make sure that the Russian banks 
they own, and not foreign creditors, stand first in line when the 
Government eventually resumes paying its debts. Mr. Chernomyrdin's 
return may be a sign that Mr. Yeltsin feels increasingly unable to stand 
up to these industrial tycoons. 

Despite these disturbing signs, Washington should not postpone next 
week's summit meeting. That would diminish Mr. Yeltsin's waning 
political prestige. Instead Mr. Clinton and his entourage should use 
their stay in Moscow to get a firsthand reading of Russia's increasingly 
volatile political scene. Mr. Clinton should also press for better 
coordination on foreign policy issues. Mr. Yeltsin's outburst last week 
against American missile attacks on terrorist targets and Moscow's 
excessive indulgence of Saddam Hussein highlight the urgent need for 
repair work in this area. 

Finally, Mr. Yeltsin and Mr. Chernomyrdin should be reminded that moving 
forward with economic reforms is the best prescription both for healing 
Russia and for maintaining strong American support. 

******

#9
Date: Tue, 25 Aug 1998 01:03:55 +0400 (WSU DST)
From: austgreen@glas.apc.org (Renfrey Clarke)
Subject: My Experience of Cows

My Experience of Cows, or Carol Williams on Russian Agriculture

As a foreign journalist in Moscow, I'm reluctant to criticise
the work of colleagues - life here is hard enough without having your
late-night howlers sniped at. But people in the West have a tendency
to believe what we write, and if more than the odd bit of it is
rubbish, some comment ought to be made. So I can't let Carol
Williams' article "Russia copes with crisis in agriculture" (JRL
2322) pass without a broadside.

"In the slothful days of the Soviet Union...Russia could never feed
itself."

The diet was certainly monotonous, but I don't recall that
anyone has been able to point to a major incidence of malnutrition
after the 1950s. In the latter decades of the Soviet era, Russia
could in fact have fed itself, had it needed to - the imports were
mainly of animal feed grain to increase meat consumption.
Incidentally, malnutrition has made a comeback since the USSR was
dissolved. Russia copes?

"Despite stunning growth in most consumer and service industries,
food production is still in the clumsy hands of Communist
ideologues..."

Stunning growth of consumer industries? Has Carol been to
Ivanovo lately, and looked at what remains of Russian textile
production? Or checked out the Russian footwear industry, or tried to
buy a Russian-made TV set? Overall, output in the consumer goods
sector has fallen by considerably more than the general collapse. As
for Communist ideologues, it's hard to find a KPRF parliamentary
fraction member who has more than a party-primer grasp of Marxism,
and I doubt if farm directors are more cerebrally inclined.

"Weekend gardeners who tend small plots attached to their dachas in
the countryside grow 91% of the potatoes consumed in Russia, 77% of
all vegetables, 56% of meat and 47% of dairy products..."

Has Carol ever tried keeping a cow, and milking it at weekends?
My experience of cows is that they get very unhappy if not milked
morning and evening, seven days a week. The figures cited are
evidently for all private-plot production, the bulk of which is
carried out not by dachniki, but by farm workers in their off hours.
Incidentally, the figures for private meat and dairy production rest
on feed concentrates that are generally obtained from the farms.
Feedlots provide a high proportion of meat and dairy output in the
West as well.

"In the Soviet era, Western critics often pointed to the greater
output from private plots as evidence that incentive was what was
lacking on the state farms, as the individual gardens then produced
about 25% of Russia's food while occupying less than 3% of its
cultivated territory."

In the Soviet era, Western critics who were idiotic enough to
use this argument were dealt with scathingly by people who knew the
first thing about agricultural economics. Of course a hectare of
private strawberries was worth more than a hectare of collective-farm
wheat! After all, vastly more work had to be concentrated on it. It's
the labour, not the land area, that's crucial here.

"Russians have no right...to move out of the communities in which
they are registered to seek job opportunities elsewhere."

This ceased to be true even for peasants after Khrushchev let
them have passports. The current constitution guarantees Russians the
right to choose their place of residence. Granted, Luzhkov still does
his damnedest to stop them moving to Moscow. But the main factor that
keeps Russians relatively immobile is the difficulty of finding
affordable housing rather than legal or bureaucratic obstacles.

At a couple of other points in the article, complex issues are
treated in a fashion which is far too simplistic, and the conclusions
implied are quite misleading. Foodstuffs imported into Russia are
indeed made more expensive by tariff barriers, but on the other hand
they're often made much cheaper by agricultural subsidies in the
countries where they're produced. Meanwhile, Russian agriculture now
receives very little in the way of subsidies. My hunch is that even
with the tariffs, Russian producers lose quite badly out of this. At
any rate, Russian agriculture has a compelling case for protection.
"Land Ownership Root of Problem"? The notion that Russian
agriculture would prosper if only land could be used as collateral
for loans may seem appealing, but I don't think it holds up. Even
Russian farms that are relatively well capitalised still tend to have
great difficulty turning a profit, and I can think of a variety of
reasons for this that have nothing to do with the system of land
tenure.
The key problem of Russian agriculture, I suspect, is the 1990s
version of the "scissors crisis". A range of studies have shown that
the prices agriculture has to pay for its inputs - machinery, fuel,
fertilizer - have risen far more rapidly than the prices that the
farms receive for their products. This is a predictable consequence
of removing price controls in sectors of industry that are
characterised by structural monopolies; rarely facing much
competition, the industrialists can raise their prices to the very
limit of what they think the farms can pay. The farms, on the other
hand, face intense competition, not merely from one another but also
from heavily subsidised producers in the European Union.
If the price structures of Russian agriculture are such that
making a profit is barely a possibility, then agricultural land is
worth very little, and no bank would give you a meaningful loan on
the basis of it.
In my view, the collapse of Russian agriculture (and of light
consumer industry, whose price structures are similar) has been an
inescapable consequence of "reform" as practised by Gaidar and his
successors. If anyone wants to know why things are miserable down on
the farm, the first place they should look is in the Kremlin.

******

#10
Date: Mon, 24 Aug 1998 
From: fweir@rex.iasnet.ru 
For the Hindustan Times
From: Fred Weir in Moscow

MOSCOW (HT Aug 25) -- Boris Yeltsin called on Russians to
``accept and support'' his decision to sack Sergei Kiriyenko and
bring back disgraced former prime minister Viktor Chernomyrdin
Monday, but Yelena Solovyova says all she sees is a reign of
insanity in the Kremlin.
``Nothing here can be understood logically,'' says the
pert, blonde 49-year old accountant. ``There is a revolving door
at the top just because Yeltsin doesn't trust his own shadow.
``As long as this country is governed by a paronoid
person, we will have nothing but endless, senseless changes.''
Last March Mr. Yeltsin sacked Mr. Chernomyrdin, his prime
minister of five years, blaming him for a deepening financial
crisis that left millions of Russian workers without wages for
months at a time.
He brought in Mr. Kiriyenko, a 36-year old political
unknown, and pledged the youthful new prime minister would turn
around Russia's long economic slump with a fresh wave of market
reforms.
This week Mr. Yeltsin staged the exact reverse of that
act, saying the country needs ``the experience and strength of
Chernomyrdin'' to pull it out of a galloping financial crisis and
collapse of public confidence.
``This is, of course, vintage Yeltsin,'' says Igor Bunin,
an analyst at the independent Centre for Political Technologies.
``When things go wrong, find a scapegoat to blame and promise
that everything will be put right under renewed leadership.
``But this time it doesn't look like people will buy
it.''
Under Mr. Kiriyenko Russia's economy has sunk like a
stone. Last week the rouble was devalued, many banks froze
depositors' accounts, and prices on imported food and consumer
goods took off.
``Yeltsin wants to say that Kiriyenko caused all our
troubles, but I haven't received any wages since last October --
and Chernomyrdin was prime minister then,'' says Alexander
Vassiliyev, one of 300 miners from the arctic coal centre of
Vorkuta who have been picketing the Russian government house
for the past three months.
``Changing prime ministers is just a stale old trick to
fool people,'' says the burly, 44-year old. ``But we know who's
really responsible.''
The miners have been living in a ramshackle tent village,
just outside the white granite-and-glass government headquarters,
living on gifts of food and cigarettes from sympathetic
Muscovites.
They now say they will not leave until Mr. Yeltsin does.
``A fish rots from the head down,'' says Valentin
Drachenko, 49, another of the protesters.
``As long as Yeltsin is president our misery will
continue. I will not go home to my family until I can tell them
the bastard is gone.''
Even people who believe Mr. Chernomyrdin is the right man
for the job say they fear Mr. Yeltsin is too capricious to let
him do it properly.
``Chernomyrdin is a strong and experienced man and I'm
very happy to see him coming back,'' says Anna Terukhova, a

36-year old real estate agent.
``But if we want real change in this country I'm afraid
someone has to deal with the main cause of instability. And
that's Yeltsin.'' 

******

#11
RFE/RL NEWSLINE Vol. 2, No. 163 Part I, 25 August 1998

CHERNOMYRDIN TO FORM COALITION GOVERNMENT. Acting Prime
Minister Viktor Chernomyrdin and the heads of parliamentary
factions, including Communist Party chief Gennadii Zyuganov,
agreed on 24 August to form a coalition government.
According to Interfax, State Duma Chairman Gennadii Seleznev
said that a "trilateral" commission composed of members of
the government and both houses of the parliament will draw
up two documents, a plan for overcoming the economic crisis
and a "political treaty" between the executive and the
legislature. Based on when these documents are drawn up, the
Duma Council will decide when it can hold its plenary
session to consider Chernomyrdin's candidacy for prime
minister. The Duma Council will meet on 28 August. Seleznev
told NTV that each Duma faction will meet individually with
Chernomyrdin to propose candidates for government positions.
JAC

FATE OF NEW GOVERNMENT, DUMA TIED. In an interview with Ekho
Moskvy, Communist Party leader Zyuganov explained that
although Russia has already experienced a coalition
government under former Prime Minister Sergei Kirienko, who
had two ministers from Yabloko, the new government will be
fundamentally different. According to Zyuganov, Chernomyrdin
has proposed that the "majority of the Duma back a specific
program" and that they "will be responsible for the
composition of the government." He added that "the majority
of the Duma will remember every time it adopts a law that it
backed this government and is responsible for its policies.
If the government fails, they [the Duma deputies] will also
fail." At the same time, Zyuganov reiterated calls for a
nationwide strike on 7 October to demand that President
Boris Yeltsin resign and a government of "popular trust" be
created. JAC

OUR HOME IS RUSSIA TRIES TO WOO YAVLINSKII. "Nezavisimaya
gazeta" on 22 August reported that leader of the Russia is
Our Home (NDR) faction, Aleksandr Shokhin, offered to
arrange that Yabloko leader Grigorii Yavlinskii be offered
the post of Duma speaker in exchange for his support of
Chernomyrdin's candidacy. According to the newspaper, NDR
realizes that it must attract Yabloko into a new
parliamentary majority made up of the NDR, the Communist
Party, Russia's Regions, and the Liberal Democratic Party of
Russia. Yabloko's popularity has grown since the last
elections, and the movement could attract the supporters of
two presidential hopefuls, Krasnoyarsk governor Aleksandr
Lebed and Moscow Mayor Yurii Luzhkov. Sergei Ivanenko, a
Yabloko deputy, dismissed Shokhin's offer with laughter and
the counterproposal that Chernomyrdin be speaker and
Yavlinskii prime minister. JAC

REGIONAL HEADS EXPRESS RESIGNATION, MILD SUPPORT... Most
regional leaders, whether for or against Chernomyrdin,
believe that he will be confirmed by the Duma--though not
necessarily without a fight. Saratov governor Dmitrii
Ayatskov, is pessimistic about Chernomyrdin's return to
government: "Viktor Stepanovich [Chernomyrdin] spent six
years trying to improve the economy--all in vain," according
to Interfax. Kemerovo governor Aman Tuleev is similarly
gloomy. He said, "Russia is not Italy where the people have
been seasoned by frequent government shake-ups. The
situation in Russia is so complicated that a social
explosion is inevitable." Krasnoyarsk governor Lebed said
that the crisis in Russia requires a "political
heavyweight," such as Chernomyrdin, and that Yeltsin's
support is "understandable since there is no attractive
alternative." Tatarstan President Mintimer Shaimiev and
Arkhangelsk governor Anatolii Yefremov both expressed
confidence that the former prime minister will be able to
ease the country's political crisis. JAC

...AND SOME REGRETS. Tambov governor Aleksandr Ryabov says
that the regional leaders need to accept some of the blame
for the current economic crisis. He told ITAR-TASS that
"often documents that are adopted by the Federation Council
were not even read by the representatives." During a press
conference after his dismissal, former Prime Minister
Kirienko revealed that he had apparently experienced his own
share of frustration with Russia's regional leadership. He
had prepared a draft law, which he had intended to submit to
the Duma, that would have given him the power to remove
regional governors and grant other governors the power to
sack mayors in order to ensure "a strict top-down line of
power in the country." JAC

*******

#12
Russian press: Yeltsin diminished by shakeup
By Peter Graff

MOSCOW, Aug 25 (Reuters) - Russia's usually divided press agreed on Tuesday
that President Boris Yeltsin's shock decision to sack his government and
reinstate ex-premier Viktor Chernomyrdin had severely and perhaps fatally
diminished his authority. 

``It is now clear that Russia not only has no government -- it has no
president either,'' said Kommersant Daily. 

``Boris Yeltsin still signs decrees. He reads out announcements to the people.
He even participates in military manoeuvres. But that means nothing. In fact,
at the present moment, Russia has no president,'' the business newspaper said.

``If a short while ago the Kremlin was foaming at the mouth, trying to show
that the president was in complete control of the situation in the country,
already the conversations of officials in hallways confess with an almost
unhushed voice: We don't know how we will survive until (the presidential
election in) 2000.'' 

The front-page headline in Izvestia said simply: ``Yeltsin gives up power.'' 

It said a Chernomyrdin government would likely be formed after a deal with the
Communist-dominated State Duma, and ``one can expect that some of the sharply
necessary anti-crisis measures will not pass through (the new government) at
all.'' 

The daily Sevodnya agreed that cooperation between Chernomyrdin and the Duma
would reduce Yeltsin's power. 

``In the long term, the Duma will become the main support for the premier. And
the president can probably count on it loyally adopting a law offering
guarantees in the case of his early retirement,'' it said. 

The English-language Moscow Times said: ``From the point of view of a sick,
old man with failing mental powers and a deep sense of paranoia, (Yeltsin's)
decision to bring back Viktor Chernomyrdin might have looked reasonable.'' 

``Yeltsin is now a lame duck whose popularity and influence will fade. The
similarities to the last days of the Suharto regime in Indonesia are growing.
It is hard to see now what can pull Russia back from the brink,'' it said. 

The pro-Communist daily Sovietskaya Rossia offered its own answer to that
question: ``Only the resignation of the president can save Russia.'' 

``In sacking the government of Kiriyenko, Yeltsin declares his own
bankruptcy,'' ran its headline. 

Several newspapers saw the hand of influential oil, media and banking tycoon
Boris Berezovsky, whose own newspapers have supported Chernomyrdin, behind the
new appointment. 

The Russky Telegraf, controlled by a Berezovsky rival, mockingly headlined its
front page, ``Berezovsky is our president,'' and predicted that Chernomyrdin
would ease the Kiryenko government's firm line on collecting tax from oil
companies pinched by falling prices. 

The popular daily Komsomolskaya Pravda and Kommersant Daily both claimed that
Chernomyrdin and Berezovsky had jointly agreed on a cabinet list. Kommersant
said key reformers would refuse to serve in the new government. 

******